Prime Minister Hun Manet focused on raising investments for Cambodia during his maiden visit as government head to the Republic of Korea, with 12 memorandum of understanding (MoUs) signed with the private sector and banking institutions from May 15 to 18.
Hun Manet met and discussed with Korean President Yoon Suk Yeol and Prime Minister Han Duck-soo, and leaders of the private sector, as well as attended the Cambodia-Republic of Korea Business Forum.
In the areas of economy and trade, the two leaders agreed to promote better trade and investment through the free trade agreements such as the Cambodia-Korea Free Trade Agreement and Regional Comprehensive Economic Partnership.
According to Hun Manet on his Facebook page, Korea is one of Cambodia’s largest trade partners with bilateral trade valued approximately $751 million, ranking 11th in 2023. “Foreign direct investment from Korea totalled more than $5 billion and was about $30 million in 2023,” he said, adding that Korea held the ninth spot.
He said Korea is also a key development partner of Cambodia, contributing to the strengthening of the workforce, improving public services and building the foundation for sustainable economic growth.
“Since 2016, the government of Cambodia has issued visas that are valid for three years with multiple entry and a one-time fee payment for Korean investors holding a general passport. [This is] to encourage Korean investment in Cambodia,” he said. “As a result, we see an increase in Korean investment projects and commercial enterprises, both large and small, in Cambodia.”
He added that Korean companies have played an important role in Cambodia’s economic landscape, with their involvement in sectors such as manufacturing, real estate, agricultural infrastructure and financial services. It has boosted economic growth and accelerated industrial development in Cambodia.
The two leaders agreed to strengthen and expand their cooperation and relationship to a “strategic partnership” to promote closer and more prosperous cooperation.
Two initiatives were agreed upon during the meeting. One is the establishment of a regular consultation session between the Korean Business Association in Cambodia and the Cambodian government. And, the other, the setting up of a special economic zone for Korean companies and the creation of a favorable business environment for Korean companies in Cambodia.
Expressing his appreciation for Hun Manet’s initiatives, Prime Minister Han Duck-soo said he would increase Korea’s official development assistance for Cambodia. Korea International Cooperation Agency (KOICA) grants financing period and concessional loans through the Economic Development Cooperation Fund.
“Cambodia is an investment destination and a potential market for the Korean industry, especially the automotive industry,” Han added.
The MoUs signed include the Financing of the Economic Development Cooperation Fund for 2022 to 2026 between the governments, the Council for the Development of Cambodia with Korea’s Ministry of Commerce, Industry and Energy on Investment Cooperation, Ministry of Commerce with Korea’s Intellectual Property Unit on the Strengthening Intellectual Property Cooperation.
Following the Cambodia-Republic of Korea Business Forum, the Cambodian Chamber of Commerce signed an agreement with the Korean Chamber of Commerce and Industry. Other agreements were also signed by National Bank of Cambodia with JB Financial Group, KB Kookmin Bank, WOORI Bank, and the Credit Bureau of Cambodia with the Credit Bureau of Korea and JB Bank, and Worldbridge Group with Daewoo E&C.
According to Pit Karuna, spokesperson for the Ministry of Rural Development, a $120 million loan agreement for phase four of the improvement of rural roads project, was also signed.
He told CamboJA News that the Korea Economic Development Cooperation Fund (EDCF / Korea Eximbank) has provided concessional loans of about $317 million for the ministry’s rural roads and bridges project between 2011 and 2023. The funds were allocated for projects in 18 provinces, including Kampong Cham, Tbong Khmum, Kampong Thom, Siem Reap and Preah Vihear.
“Phase four of the rural road improvement project will be implemented in 2024 to 2029 in six provinces – Kampong Speu, Kampot, Takeo, Kandal, Prey Veng, Svay Rieng.”
On the whole, Hong Vannak, an economic researcher at the Royal Academy of Cambodia, said trade and investment partnerships with Korea are good, with the latter nation investing in finance, real estate, agriculture and construction. This will raise employment levels and contribute to the country’s economy.
He also shared that the bilateral trade volume has increased, although there were more imports from Korea than exports. “We should do something to boost exports of our own agricultural products and those produced through direct investment by Korean companies,” he said.
In that, Cambodia should improve the quality of agricultural products to grow exports while Korea should purchase more Cambodian products to enhance bilateral trade.
He observed that in the past, Korea has provided concessional loans to Cambodia. The decision to raise bilateral loans to help build bridges and develop Cambodia is also an important point.
